Once you find the right vehicle to purchase, it all comes down to getting the right price and terms that work for your budget. Make sure you know the value of the vehicle, find out the difference between a bank loan and new or used car dealership financing, and the overall cost of the vehicle after financing in order to get the best deal.
#1 Know The Value Of The Vehicle
Before you negotiate the terms of purchasing the vehicle you are interested in, make sure you have a solid idea of the value of the vehicle. Use websites that allow you to input the features of the vehicle and find out the value of the vehicle. These sites allow you to see the price difference for that particular vehicle between dealerships and private sellers.
Also, take the time to look up similar vehicles for sale at local dealerships as well as private sellers in the area. This will allow you to see how the vehicle you are interested in is priced in your area, as well as the condition those vehicles are in.
This information will give you more leverage to negotiate a price that is fair based on the market value and condition of similar vehicles in your area.
#2 Look Into A Bank Loan
Although many dealerships offer in-house financing, it can be a smart idea to talk to your bank before you go in to negotiate the price of the vehicle and the purchasing terms.
Talking with your bank and getting pre-approved for an auto loan will allow you to see the amount of money you qualify for and ensure that the vehicle you are interested in is actually within your budget. Getting pre-approved from a bank will also allow you to compare interest rates and give you leverage to negotiate the interest rates and pricing with the dealership.
Dealerships that provide in-house financing may be able to offer you a bigger discount on the price of the car even if the interest rates are the same or higher than your bank offers when you finance through them. Be sure to carefully compare the rates and prices you can get if you finance with a bank or with the dealership.
#3 Look At The Overall Cost Of The Vehicle After Financing
When negotiating the price of your new car, do not just focus on the price of the monthly payments. Be sure to look at the interest rate and length of the loan to determine the full cost you will end up paying for the vehicle.
Often, a lower monthly payment with a longer loan term will cost you more in the long run. Look at the cost you will end up paying in the end for the vehicle after it is paid-off, not just up front and on a monthly basis, in order to get the best deal.